When deciding on the common law reasonable notice period in wrongful dismissal cases trial judges have been considering the following factors since 1960:
“The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.” (referred to as the Bardal factors)
This blog will consider a recent case where the judge considered whether the common law reasonable notice period should be increased because the availability of similar employment is limited because of COVID.
The Yee vs Hudson’s Bay Company decision
In Yee v Hudson’s Bay Company, a January 18, 2021 decision of Ontario Superior Court of Justice, the judge considered the termination of a 62 year old employee who was terminated in August 2019 after about 11.5 years service which was about 8 months before the COVID pandemic hit Canada. The Hudson’s Bay Company paid him 11 months pay in lieu of notice but Mr. Yee claimed he should have received 18 months pay in the circumstances.
The judge referenced an earlier Ontario Court of Appeal which stated:
“Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment” and concluded “It seems clear terminations which occurred before the COVID pandemic (like Mr. Yee) and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment.”
After considering all of the Bardal factors, the judge concluded that Mr. Yee should have received 16 months notice.
Lessons to be learned
- Ensure all employees sign an employment contract with an enforceable termination clause. This will avoid a wrongful dismissal case altogether.
- There is considerable litigation risk associated with wrongful dismissal cases. In this case, I think most lawyers would conclude Mr. Yee was entitled to at least 12 months notice but would not be comfortable saying how much more. A trial judge basically has carte blanche when deciding on a notice period. Two judges hearing the same case could decide significantly different notice periods. To add to the litigation risk, counsel don’t know the identity of the judge until shortly before trial. In this case, counsel basically rolled the dice and hoped for the best. In this case, the employee won unless the employer submitted an offer to settle at 16 months in which case it was likely a pyrrhic victory for the employee.
- Regularly monitor job vacancies for comparable employment for terminated employees. In the Yee case, the plaintiff applied for 90 vacant positions and employer counsel argued that the high volume of applications after COVID hit was evidence that many comparable positions existed; that is, there was similar employment available. In other words, looking for work during COVID should not result in a higher notice period. I suspect the judge concluded this evidence showed that Mr. Yee’s age (i.e. 62 years old) – as opposed to COVID – justified a longer notice period.